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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Real Man who wrote (418)8/10/1998 11:31:00 PM
From: CIMA  Read Replies (1) of 1301
 
Global Intelligence Update
August 11, 1998

Chechnya Yielding to Pressure?

On July 30, the Global Intelligence Update reported on increasing pressure
from Moscow against Chechnya, including large scale Russian military
maneuvers along the length of the Russian-Chechen border. Reported clashes
along the border on Friday, August 7, initially appeared to be an
intensification of that pressure, but reports from both sides have
subsequently downplayed the incidents, and the Chechen response to the
incidents has quickly turned conciliatory. While exactly what happened at
the border, and exactly who was responsible, are still unclear, what is
clear is that Russia has succeeded in cowing Chechnya -- an event that will
not be lost on regions within Russia, nor on the former constituent
republics of the Soviet Union.

On the morning of August 7, acting Chechen Prime Minister Turpal Atgeriyev
announced that two Russian armored personnel carriers had crossed the
border into Chechnya from Dagestan and had opened fire on a Chechen border
post. According to Atgeriyev, Russian helicopters had opened machine gun
fire on Chechen border posts in a separate incident that same morning. The
head of Chechnya's Border and Customs Service, Magomed Khatuyev, claimed
that the Russians had fired artillery at Chechen border guards as well.
Atgeriyev said that the Chechen Cabinet had met in emergency session, and
that Chechen forces had been put on high alert. A Chechen Foreign Ministry
statement blamed the incidents on Russia, calling them "an attempt to
unleash a new Caucasian war."

Russia's Deputy Interior Minister, Colonel General Leontiy Shevtsov,
initially denied altogether that there had been any incident on the border.
Said Shevtsov, "No combat actions or extremist provocations involving armed
groups from Chechnya were carried out... in the early hours of August 7 or
later." A press representative for the Dagestan Interior Ministry
concurred, stating "Over the past 24 hours there have been no clashes on
the administrative border between Chechnya and Dagestan, and certainly no
armed clashes." Later in the day on the seventh, however, the Russian
Interior Ministry changed its story somewhat, claiming there had been an
incident on the border, "which has nothing to do with border conflicts, but
has to do solely with problems arising from hooliganism."

Echoing Shevtsov, the command of the Russian North Caucasian Military
District denied that any of its forces had been involved in clashes, and
stated particularly that none of its helicopters had taken to the air on a
combat mission for several days. A high-ranking Defense Ministry official
later reportedly told the Russian news agency ITAR-TASS that the reports of
clashes had been planted by opponents of Chechen President Aslan Maskhadov
to sour relations with Russia while Maskhadov was visiting the United
States. Maskhadov, who is seen by many in Russia and Chechnya as a
moderate, had met with Russian Prime Minister Sergei Kirienko on August 1,
in talks that showed some promise of improved relations between Chechnya
and Russia.

Interestingly, by August 8, the Chechen side was altering its accounts of
events on the border. The Deputy Director of the Chechen Border Service,
Lema Kulchiyev, told Russian television that the reported clashes of August
7 could not be confirmed. A Chechen delegation headed by Deputy Prime
Minister Kazbek Makhashev was then formed to meet with "Russian power
wielding structures in Dagestan" to discuss the situation. Also on August
8, ITAR-TASS reported that, on the previous day, a joint operation of the
Russian Federal Security Service and the Chechen Shariah National Security
Ministry had secured the release of FSS Major M. Golikov, who had been held
hostage in Chechnya. It is curious that the two security services would
carry out a joint operation when the Chechen military was reportedly on
"high alert" due to Russian border provocations. Finally, on the eighth,
Russian Deputy Interior Minister Shevtsov ordered all "federal and regional
power-wielding structures" deployed along the Chechen border not to open
fire, unless there is a direct attack, and not to respond to fire from the
Chechen side.

Capping off the weekend's events, Chechen President Maskhadov reportedly
told ITAR-TASS on August 9 that "Chechnya is ready to have a single
economic and defense space, and to coordinate its diplomatic activity with
Russia." "We are even ready to agree to build our relations with the
outside world, with foreign states, upon consultations with Russia," said
Mashadov. Maskhadov even held out the possibility of Chechnya defending
Russia's southern borders, though he did not indicate which version of
those borders he was referring to. He vowed that Chechnya would not adopt
Wahhabism, fundamentalism, or extremism, and would build an Islamic state
along democratic lines. Maskhadov said that the only non-negotiable
Chechen demand was that Chechnya become a "subject of international law."

In one poignant note to the Russians about Chechnya's alternatives, he did
mention that Islamic states had begun to show interest in Chechnya, and he
would start establishing direct contact with them as soon as such overtures
were accepted. Also, noting that Russia had not paid for Chechen
maintenance and defense of the oil pipeline through Chechnya, Maskhadov
said that if the situation was not remedied, he would be forced to "cut off
the pipeline."

Maskhadov, who was in the United States ostensibly to attend an Islamic
conference, reported disappointing meetings with U.S. Congress members. He
termed U.S. policy toward Chechnya "cautious," and said that even those in
Congress who paid lip service to the idea of Chechen independence often did
not know where Chechnya was located. "Some of them were even surprised
that Chechnya's population is Muslim," said Maskhadov. During his visit to
the U.S., Maskhadov sought investment for Chechnya, guaranteeing its
commitments with oil and insisting that investment would help erase the
instability that is currently responsible for keeping investment out.

Despite his threats to seek closer relations with Islamic countries or to
sever the oil pipeline, Maskhadov has apparently caved into the Russians.
Perhaps the Russian 58th Army maneuvers on Chechenya's borders intimidated
him. Perhaps he realized in Washington that he could expect little
tangible support from politicians who did not even know where Chechnya was.
Perhaps it was a little of both. But Maskhadov's offer to reduce Chechen
independence to little more than a matter of legal semantics can only be
seen as a victory for Russia. Regardless of who was responsible for the
border clashes, the quick suppression of the situation from both the
Russian and Chechen sides demonstrates where this relationship is going.
While a sudden regime change in Chechnya could temporarily reverse this
trend, Maskhadov's government has failed to solidify its independence, and
any subsequent regime would have similar difficulties.

The withering of Chechen resistance is certainly being watched with
trepidation from Tbilisi to Almaty. Success in the Caucasus can only
strengthen Russia's dreams of a return to regional supremacy and even
empire.
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